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Egypt ranks second after Ukraine on list of countries most at risk from debt

September 14, 2023 at 2:18 pm

This picture taken after sunset on July 24, 2023 shows a view of the Cairo skyline from the Moqattam district. [KHALED DESOUKI/AFP via Getty Images]

Egypt has been ranked as “the country second most at risk of a debt crisis” after war-torn Ukraine, according to an analysis by Bloomberg. Official data showed that, taking into account public debt, interest costs and yield on dollar bonds, Egypt’s economy was the most at risk in the Middle East and second in the world.

According to Bloomberg, Tunisia, Bahrain and Jordan ranked respectively after Egypt as the most at risk of debt crisis in the Arab world.

Commenting on the report, political economist and Deputy Director of the Tahrir Institute for Middle East Policy, Timothy Kaldas, said, “Ukraine was invaded by the Russian army, while the Egyptian economy was invaded by its [own] army.”

READ: Egypt: expectation of ‘terrifying’ debt within 5 years

Official figures showed on Sunday that annual inflation in Egypt reached a new record of 39.7 per cent in August, up from 38.2 per cent in July. By early this year, the Egyptian pound had lost half of its exchange value against the US dollar. Since March 2022, Egypt has reduced the exchange rate of the pound three times, from an average of 15.7 pounds against one dollar, to 30.9 pounds.

Local markets in Egypt are still affected by the decline in the exchange rate of the pound against the dollar. This is reflected in import prices and the high cost of local products.

As well as an increase in the inflation rate of 1.6 per cent over the figure in July, consumer prices recorded the highest values in more than 40 years in August, according to Egypt’s National Statistics organisation.